Frequently Asked Questions on Contracts and Contract Law
What must a valid contract contain?
Every contract must clearly define the contracting parties, the subject matter of the contract, mutual rights and obligations, price (if applicable), deadlines for performance, and the method of termination. Provisions on liability, contractual penalties, and dispute resolution are also important.
Is a written form always required for a contract?
A written form is always recommended, even if not required by law. However, for some contracts it is mandatory – for example a construction contract for work, transfer of a share in a limited liability company, a pledge agreement for real estate, or a lease agreement for more than one year.
What is the difference between a contract for work and a purchase contract?
A purchase contract is used to transfer an already finished item. A contract for work is used when the item is still being created or when the result of activity is important (e.g. renovation, construction, website, application). In practice, these are often mistakenly interchanged.
How do contractual penalties work?
A contractual penalty is a sanction for breach of contract. It must be agreed in writing and clearly defined – including the amount, conditions for application, and due date. Only what is expressly agreed in the contract can be enforced, not what is “usually customary”.
What should be checked when signing a contract for work?
Key elements include deadlines, precise specification of the work, procedure for changes (so-called change requests), penalties for delay, handover protocol, liability for defects, and warranty period. Unclear contracts in construction and IT projects are among the most common sources of disputes.
Can I withdraw from a contract?
Withdrawal is possible if allowed by law or expressly agreed in the contract. Typically, it applies in cases of serious breach of obligations, non-performance, or delay by the other party. The effects are usually ex tunc – as if the contract had never been concluded.
Are contracts concluded via email valid?
Yes, if the correspondence shows agreement on essential terms (offer and acceptance). In business relationships, email agreements are commonly enforceable. However, caution is needed in situations where the law requires a written form.
When is notarization or attorney verification required?
Mandatory verification is required only in exceptional cases (e.g. real estate transfers, transfer of a share in an LLC). In other cases, it is voluntary, but advisable where disputes may arise or where clear confirmation of the identity of signatories is needed.
How much does contract drafting or review cost?
Simple contracts usually start at around 3,000–5,000 CZK + VAT. More complex contracts, contracts for work, framework agreements, or terms and conditions typically range from 8,000–20,000 CZK + VAT depending on scope and risk level.
